The Directorate of Revenue Intelligence arrested four people for their role in an alleged Rs 2,000 crore money laundering racket at the Bharat Diamond Bourse in Mumbai, PTI reported on Friday. Unidentified officials said diamond traders in connivance with valuers inflated the price of precious stones imported to siphon black money abroad.

Officials discovered the crime after a tip-off led them to raid the facility at Bandra Kurla Complex and intercept consignments of “low quality” raw diamonds that were declared to be worth Rs 156 crore. When the directorate’s experts reevaluated the seized diamonds, they found that they were worth only Rs 1.2 crore.

Bharat Diamond Bourse Vice President Mehul Shah said he was shocked to learn about the development. “No one in the industry had heard of these arrested valuers and we are surprised how they were valuing diamonds. Our industry is very small and people know each other,” Shah said.

The industry’s organisation, Gem and Jewellery Export Promotion Council, said its members helped bust the violations. “All the companies indulging in this malpractice were not members of our council,” the industry organisation said, adding that it has been pushing for the government taking over as the sole approving authority for valuers.